BMC Bmc Software, Inc.

BMC Software Reports First Quarter Financial Results HOUSTON, July 27 /PRNewswire-FirstCall/ -- BMC Software, Inc. (NYSE:BMC) today announced financial results for its fiscal 2005 first quarter ended June 30, 2004. BMC Software's net earnings excluding special items for the first quarter of fiscal 2005 were $32.1 million, or $0.14 per diluted common share, which compares to $0.03 a year ago and the Company's revised guidance range of $0.11 to $0.14 provided earlier this month. The fiscal 2005 first quarter net earnings on a GAAP basis were $51.8 million, or $0.23 per share, which compares to a net loss of $6.1 million, or a loss of $0.03 per share, in the first quarter of fiscal 2004. Included in the financial tables is a reconciliation of results excluding special items and GAAP results. Total revenues in the first quarter of fiscal 2005 were $326.0 million, an increase of 5 percent compared to the first quarter of fiscal 2004, and was within the Company's revised guidance of $318.0 million to $328.0 million provided earlier this month. Operating expenses, excluding special items, were $299.0 million, compared to $321.5 million in the same quarter of fiscal 2004. "The first quarter presented a challenging revenue environment for our industry and for BMC. While disappointed with our revenue performance, which was in part due to weakness in the United States, I was pleased with our expense controls and improved operating margins in the quarter," said Bob Beauchamp, president and CEO, BMC Software. BMC Software maintained its strong financial position with cash flow from operations in the quarter of $90.1 million. The cash and marketable securities balance was $1.2 billion, and the total deferred revenue balance was $1.39 billion. BMC Software continued its stock repurchase program by spending $20.0 million to repurchase approximately 1.2 million shares during the first fiscal quarter. Approximately $287 million remains in this program. License bookings in the first quarter of fiscal 2005 were $83.6 million, a decrease of 20 percent compared to the first quarter of fiscal 2004. The following table illustrates license bookings: First Quarter FY05 Business Segment Results ($ in millions) License Net Change License License Revenues to Bookings* Bookings Deferred Percent Growth License vs. Q1FY04 Revenues Data Management - D/S 9.6 -- 9.6 2 % Data Management - MF 27.3 (10.8) 16.5 (28)% Enterprise Data Management 36.9 (10.8) 26.1 (20)% Scheduling & Output Mgmt. 8.8 0.1 8.9 (44)% MAINVIEW(R) 7.5 (2.1) 5.4 (50)% PATROL(R) 17.9 (1.7) 16.2 (33)% Enterprise Systems Management 34.2 (3.7) 30.5 (40)% Remedy(R) 28.3 (1.6) 26.7 32 % Security & Other 0.9 (0.6) 0.3 (63)% Total BMC 100.3 (16.7) 83.6 (20)% * License bookings measure the value of new license contracts signed during the quarter, including both the amount that goes to the income statement and the amount that goes to the deferred license revenue account on the balance sheet. License bookings can be calculated by adding license revenues to the net change in the deferred license revenue balance. Second Quarter and Fiscal 2005 Guidance The Company expects second quarter revenues to be in the $340 to $355 million range and expects second quarter earnings per share excluding special items to be in the $0.12 to $0.16 range. These expectations include an estimated $10 million in revenues and a negative earnings per share impact of one cent related to the recent acquisition of Marimba. Second quarter estimates do not include an estimated $0.05 per share of amortization of acquired technology and intangibles, exclusive of the Marimba acquisition. The Company expects fiscal 2005 revenues to be in the $1.46 to $1.49 billion range and expects fiscal 2005 earnings per share excluding special items to be in the $0.64 to $0.74 range. These expectations include an estimated $30 million in revenues and a negative earnings per share impact of two cents related to the recent acquisition of Marimba. Fiscal 2005 estimates do not include an estimated $0.20 per share of amortization of acquired technology and intangibles, exclusive of the Marimba acquisition. BMC Software expects cash flow from operations for fiscal 2005 to be over $400 million, which is unchanged from prior expectations. A conference call to discuss first quarter results is scheduled for July 27, 2004 at 11:00 a.m. central time. Those interested in participating may call (719) 457- 2633 and use the passcode BMC. To access a replay of the conference call, which will be available for one week, dial (719) 457-0820 and use the passcode BMC. A live webcast of the conference call and presentation will be available on the company's website at http://www.bmc.com/investors. A replay of the webcast will be available within 24 hours and archived on the website for 90 days. Non-GAAP Financial Measures This press release includes financial measures for net earnings, earnings per share (EPS) and operating expenses that exclude certain charges and, therefore, have not been calculated in accordance with U.S. generally accepted accounting principles (GAAP). A detailed reconciliation between the GAAP results and results excluding special items (non-GAAP) is included with the financial tables accompanying this press release. BMC Software has provided these non-GAAP measures in its press releases reporting historical financial results because the Company believes these measures provide a consistent basis for comparison between quarters, as they are not influenced by certain non-cash or non-recurring expenses and are therefore useful to investors in helping them understand the financial condition of BMC Software by focusing on the performance of its core operations. Management uses these non-GAAP financial measures internally to evaluate the Company's performance and as a key variable in determining management compensation. These non-GAAP measures should not be considered an alternative to GAAP, and these non-GAAP measures may not be comparable to information provided by other companies. About BMC Software BMC Software, Inc. (NYSE:BMC) is a leading provider of enterprise management solutions that empower companies to manage their IT infrastructure from a business perspective. Delivering Business Service Management, BMC Software solutions span enterprise systems, applications, databases and service management. Founded in 1980, BMC Software has offices worldwide and fiscal 2004 revenues of more than $1.4 billion. For more information about BMC Software, visit http://www.bmc.com/. This news release contains both historical information and forward-looking information. Statements of plans, objectives, strategies and expectations for future operations and results, identified by words such as "believe," "anticipate," "expect," "estimate" and "guidance" are forward-looking statements. Numerous important factors affect BMC Software's operating results and could cause BMC Software's actual results to differ materially from the results indicated by this press release or by any other forward-looking statements made by, or on behalf of, BMC Software, and there can be no assurance that future results will meet expectations, estimates or projections. These factors include, but are not limited to, the following: 1) BMC Software's revenues and earnings are subject to a number of factors, including the significant percentage of quarterly sales typically closed at the end of each quarter, that make estimation of operating results prior to the end of a quarter extremely uncertain; 2) BMC Software's operating costs and expenses are relatively fixed over the short term; 3) increased competition and pricing pressures could adversely affect BMC Software's earnings; 4) growth in BMC Software's mainframe revenues is dependent on demand for significant additional mainframe MIPS capacity; 5) BMC Software's maintenance revenue could decline if maintenance renewal rates decline or if license revenues do not grow; 6) new software products and product strategies may not be timely introduced or successfully adopted; 7) BMC Software's quarterly cash flow from operations is and has been volatile and is dependent upon a number of factors described in BMC Software's filings with the SEC; 8) BMC Software's effective tax rate is subject to quarterly fluctuation and any change in such tax rate could affect the Company's earnings; and 9) the additional risks and important factors described in BMC Software's quarterly reports on Form 10-Q and in its Annual Report to Stockholders on Form 10-K for the fiscal year ended March 31, 2004 and other filings with the SEC. BMC Software undertakes no obligation to update information contained in this release. BMC Software, the BMC Software logos, and all other BMC Software product or service names are registered trademarks or trademarks of BMC Software, Inc. All other trademarks or registered trademarks belong to their respective companies. BMC SOFTWARE, INC. AND SUBSIDIARIES STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended June 30, Fiscal Fiscal Percentage Fiscal Fiscal 2004 2005 Change 2004 2005 (In millions, except Percentage of per share data) Sales Revenues: License $107.6 $100.3 -7% 34.7% 30.8% Maintenance 183.5 204.8 12% 59.2% 62.8% Professional services 18.8 20.9 11% 6.1% 6.4% Total revenues 309.9 326.0 5% 100.0% 100.0% Selling and marketing expenses 137.9 124.7 -10% 44.5% 38.3% Research and development expenses 127.3 109.3 -14% 41.1% 33.5% Cost of professional services 19.0 20.5 8% 6.1% 6.3% General and administrative expenses 37.3 42.7 14% 12.0% 13.1% Amortization of acquired technology & intangibles 15.6 16.1 3% 5.0% 4.9% Total operating expenses 337.1 313.3 -7% 108.8% 96.1% Operating loss (27.2) 12.7 n/m -8.8% 3.9% Other income, net 20.8 17.6 -15% 6.7% 5.4% Earnings (loss) before income taxes (6.4) 30.3 n/m -2.1% 9.3% Income tax provision (benefit) (0.3) (21.5) n/m -0.1% -6.6% Net earnings (loss) $(6.1) $51.8 n/m -2.0% 15.9% Diluted earnings (loss) per share $(0.03) $0.23 n/m Shares used in computing diluted earnings (loss) per share 229.6 225.1 -2% BMC SOFTWARE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, June 30, 2004 2004 (Unaudited) (in millions) Current Assets: Cash and cash equivalents $612.3 $789.2 (a) Marketable securities 296.6 169.8 (a) Trade accounts receivable, net 172.6 120.7 Current trade finance receivables, net 175.5 146.0 Other current assets 167.9 169.5 Total current assets 1,424.9 1,395.2 Property and equipment, net 396.0 399.9 Software development costs and related assets, net 138.9 133.7 Long-term marketable securities 304.1 277.4 (a) Long-term finance receivables, net 158.7 122.8 Acquired technology, goodwill and intangibles, net 520.1 507.8 Other long-term assets 102.1 105.3 $3,044.8 $2,942.1 Current liabilities: Accounts payable and accrued liabilities $318.5 $204.1 Current portion of deferred revenue 668.4 663.1 Total current liabilities 986.9 867.2 Long-term deferred revenue 733.2 731.5 Other long-term liabilities 109.5 97.5 Total stockholders' equity 1,215.2 1,245.9 $3,044.8 $2,942.1 (a) Total cash and marketable securities are $1,236.4 at June 30, 2004. BMC SOFTWARE, INC. AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended June 30, Fiscal Fiscal 2004 2005 (In millions, except per share data) Cash flows from operating activities: Net earnings (loss) $(6.1) $51.8 Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: Depreciation and amortization 57.7 49.5 (Gain) loss on marketable securities 0.8 2.1 Earned portion of restricted stock compensation 0.6 0.3 Release of tax accrual -- (30.0) (Increase) decrease in finance receivables 91.3 65.9 Increase (decrease) in payable to third-party financing institutions for finance receivables (35.1) (18.3) Net change in trade receivables, payables, deferred revenue and other components of working capital 14.8 (31.2) Net cash provided by operating activities 124.0 90.1 Cash flows from investing activities: Cash paid for technology acquisitions and other investments, net of cash acquired (6.1) (5.5) Adjustment of cash paid for Remedy acquisition 7.2 -- Return of capital for cost-basis investments -- 0.7 Purchases of marketable securities (163.2) (5.1) Maturities of/proceeds from sales of marketable securities 49.1 146.4 Purchases of property and equipment (12.7) (16.8) Capitalization of software development costs and related assets (15.0) (14.2) Net cash used in investing activities (140.7) 105.5 Cash flows from financing activities: Payments on capital leases -- (1.0) Stock options exercised and other 1.3 4.9 Treasury stock acquired (60.0) (20.0) Net cash used in financing activities (58.7) (16.1) Effect of exchange rate changes on cash 3.4 (2.6) Net change in cash and cash equivalents (72.0) 176.9 Cash and cash equivalents, beginning of period 500.1 612.3 Cash and cash equivalents, end of period $428.1 $789.2 BMC SOFTWARE, INC. AND SUBSIDIARIES SUPPLEMENTAL ANALYSIS OF EFFECT OF SPECIAL ITEMS FOR THE THREE MONTHS ENDED JUNE 30, 2004 (Unaudited) As Special Before Reported Items Special Items (In millions, except per share data) Revenues: License $100.3 $ -- $100.3 Maintenance 204.8 -- 204.8 Professional services 20.9 -- 20.9 Total revenues 326.0 -- 326.0 Selling and marketing expenses 124.7 (0.7)(a) 124.0 Research and development expenses 109.3 2.5 (a) 111.8 Cost of professional services 20.5 -- 20.5 General and administrative expenses 42.7 -- 42.7 Amortization of acquired technology & intangibles 16.1 (16.1)(b) -- Total operating expenses 313.3 (14.3) 299.0 Operating loss 12.7 14.3 27.0 Other income, net 17.6 -- 17.6 Earnings (loss) before income taxes 30.3 14.3 44.6 Income tax provision (benefit) (21.5) 34.0 (c,d) 12.5 Net earnings (loss) $51.8 $(19.7) $32.1 Diluted earnings (loss) per share $0.23 $(0.09) $0.14 Shares used in computing diluted earnings (loss) per share 225.1 225.1 225.1 (a) Changes in estimates related to real estate exit costs $1.8 (b) Amortization of acquired technology & intangibles $(16.1) (c) Release of tax accrual related to IRS settlement $30.0 (d) Tax effect of special items $4.0 http://www.newscom.com/cgi-bin/prnh/20011003/BMCLOGO http://photoarchive.ap.org/ DATASOURCE: BMC Software, Inc. CONTACT: Investors, Neil Yekell, +1-713-918-4233, or , or Media, Arch Currid, +1-713-918-3236, or , both of BMC Software, Inc. Web site: http://www.bmc.com/

Copyright